May & July ’17 Auction Analysis – Investors Unfazed By Politics

It's been another eventful summer for the UK thanks to the 'snap' general election and continuing speculation regarding Brexit, but investors seem to be becoming increasingly resilient to all this uncertainty, as evidenced by strong May and July auction sales volumes.

Both Allsop and Acuitus have undertaken some excellent analysis of the 2017 auction market to-date, and we were present at both of their seminars in early September where this analysis was discussed:

Click here to download Allsop's Summer Review '17

Click here to download Acuitus & MSCI's CPAD (Commercial Property Auction Data) report for Summer '17

Key issues for Private Investors identified include:

  • Yields for quality retail lots remain stable around the 5% mark - if you want the best assets you need to be bullish
  • An increasing proportion of lots are being sold by private property companies & institutions - arguably a good thing for buyers as the sale documents should be in order (unlike with receivership sales) and the asset should have been 'cleaned up' and therefore be investment grade
  • The main UK banks are withdrawing from the sub £1m loan market, due to new 'Ring-Fencing' rules, meaning investors looking for smaller lots will need to work with brokers and specialist lenders to get access to competitive loans - not easy in auction timeframes - so plan ahead!

The below blue-chip investments are representative of the pricing for quality investments in the current market. To be clear, most lots sold in auction don't meet our criteria of quality investments and our regular Auction Analysis commentary is not intended to cover those lots; its intention is to give our readers an idea of what good quality, hassle-free properties are selling for in the open market.

Lot 42 - Iceland, Boscombe

Iceland Boscombe

Description: Freehold 10,000 sq.ft. ground and basement unit with upper floor flats sold off on long leases and with parking for 12 cars.

Tenancy: Let to Iceland Foods for 25 years from 28/02/2005 with a break in 28/02/2025 for £75,093 p.a. FR&I, the property is part sublet.

Location: High street location near Bournemouth

Guide Price: £950,000 (7.9% gross)

Result: £980,000 (7.6% gross)

Our comment: Priced at an attractive guide, this was always worth a bid.  Perhaps other buyers were put off by the fact that the unit is partly sublet, but we were delighted to acquire this for a private investor so close to the guide. We advised our buyer, who had previously acquired a lower-yielding London investment via us to look at this in order to diversify his portfolio yield and risk, and for a first auction buy, he has done well.

Lot 74 – Pizza Hut, Bromley, Greater London

Pizza Hut Bromley

Description: Freehold takeaway unit with upper floor flats sold off on a long lease

Tenancy: Let to a franchisee of Pizza Hut on a lease expiring in May 2019 for £16,250 p.a.

Location: Secondary retail location in a popular London suburb

Guide Price: ca. £210,000 (7.7% gross)

Result: £265,000 (6.1% gross)

Our comment: It’s not often you can find a nice London investment at this budget and we snapped this one up for one of our long-term portfolio investors based nearby. Despite it having only 2 years on the lease, the rent is sustainable and location a busy one, and despite the tenant only being a franchisee, they have multiple branches and can be considered stronger than the average.

Lot 45 - Europcar, Bradford

Europcar, BradfordDescription: Freehold motor investment with parking for ca. 50 cars

Tenancy: Let to Europcar for 15 years from 13/12/2016 for £35,000 FR&I

Location: Industrial location 0.5 miles from Bradford town centre

Guide Price: £540,000 (6.5% gross)

Result: £592,000 (5.9% gross)

Our comment: We acted for the seller on this one, and it was perfect for auction given it ticks a lot of the boxes many of the investors moving from residential to commercial want i.e. Blue-chip, long lease, inflation-linked rent reviews, whole building, large plot and good lot size. We guided it at a fair price from the outset in order to attract serious buyers only and will be selling one more Europcar, in Liverpool, in the October auction.

If you are looking for commercial property investment in 2017 by auction or privately we can assist. We have a number of off-market investments available now and will be actively buying and selling in the upcoming October auction.  We are also hosting an Autumn Market Review on Wednesday 8th November in Central London, please contact us here to find out more.

Share on facebook
Share on twitter
Share on linkedin
Share on whatsapp
Share on pinterest
Share on email



Don’t miss out on our opportunities

Advanced Search

Try Selecting Multiple Options to search

Recent Articles:

22 Lockdown Deals Done as opportunistic enquiries surge

In the 3 months since the nationwide lockdown commenced in late March, the Prideview team has dealt with an unexpected …

Read More

Covid-19 debate: Buy now or wait til September?

For anyone looking for investment opportunities, this is the key question of the moment. Listen to these highlights of a …

Read More

Infographic: Pro Tips for Landlords Facing Coronavirus

If you found this useful, check out our full analysis of these issues in our Complete Guide for Landlords Facing …

Read More

Current Opportunities

In Auction
£ 375,000

Vacant Shop & Flat, Feltham, Greater London

98 Harlington Road West, Feltham, Middlesex, TW14 0JJ
Current Opportunity
Call for price

McColl’s & Well Pharmacy, Manchester

183/185 Victoria Avenue, Higher Blackley, Lancashire, M9 0RB
In Auction
£ 2,350,000

Development Site with Planning, Leicester

510 Melton Road, Leicester, Leicestershire, LE4 7SP
Call for price

Gym & Cafe, Liverpool

Lower Ground Floor, Silkhouse Court, 7 – 17 Tithebarn Street, Liverpoool, L2 2DP
Call for price

Heron Foods, Crewe

Heron Foods, site of former Merlin PH, Bradfield Road, Leighton Crewe CW1 3RH
Call for price

Co-op Food, Loughborough

Co-Op KnightThorpe Road, Loughborough, Leicestershire, LE11 4JX
Current Opportunity
£ 1,000,000

Vacant Restaurant & 3 Flats with Development Potential, Newington

53-57 High Street, Newington, Kent, ME9 7JJ
£ 50,000

Vacant (To Let) Retail Unit, Doncaster

Formerly The Factory Shop, Scrooby Road, Harworth, Doncaster, Nottinghamshire, DN11 8JW

Vacant Former Post Office, Pinner, Greater London

Ground Floor Unit, 67 Bridge Street, Pinner, HA5 3JB
Call for price

Sainsbury’s, Pharmacy & Restaurant, Wootton

Berryfields Local Centre, Fields Road, Wootton, Bedfordshire, MK43 9FZ

The Home of the Blue-Chip Investor

Click the logos below to see relevant investment properties